Why Is ICD-10-CM/PCS Necessary?

There are two main reasons that the transition to ICD-10-CM/PCS is necessary:

Payors cannot pay claims fairly using ICD-9-CM since the classification system does not accurately reflect current technology and medical treatment. Significantly different procedures are assigned to a single ICD-9-CM procedure code. Limitations in the coding system translate directly into limitations in the diagnosis-related groups (DRG).

The healthcare industry cannot accurately measure quality of care using ICD-9-CM. It is difficult to evaluate the outcome of new procedures and emerging health care conditions when there are not precise codes. Most importantly, we have a mission to improve our ability to measure health care services provided to our patients, enhance clinical decision-making, track public health issues, conduct medical research, identify fraud and abuse and design our payment systems to ensure services are appropriately paid.

ICD-10 Significantly Increases Code Specificity

There are a number of areas within the ICD-9-CM where the country could benefit from the greater detail provided by having more extensive codes. While there is greater specificity offered in the majority of the ICD-10-PCS codes, there will continue to be options for broader, generalized codes when the specific details regarding a patient's condition may not be known or documented. Additionally, the ICD-9-CM classification has not kept up with medical knowledge. Some examples are as follows:

Example: ICD-9-CM does not accurately reflect current technology and medical treatment. Since ICD-9-CM does not accurately describe advancements in technologies, significantly different procedures are assigned to a single ICD- 9-CM procedure code. Limitations in the coding system translate directly into limitations in coverage and reimbursement.

Example: CMS has had difficulties identifying and paying for new technology. This has been a particular problem in the cardiovascular and orthopedic parts of ICD-9-CM where many categories have no room for more ICD-9-CM codes. Some of the recent problems have included new devices used in spinal fusions, new cardiac defibrillator devices, and drug eluting stents, among others.

The Benefits Outweigh the Costs

An independent study conducted by RAND concluded that the benefits of ICD-10-CM/PCS are likely to exceed initial implementation costs within just a few years. Furthermore, the cost of doing nothing may be greater than the actual implementation. Any delay in adoption of ICD-10-CM/PCS will cause an increase in future implementation costs as the management of health information becomes increasingly electronic and the costs of implementing new coding systems increase due to required systems and application upgrades.